Back above a key swing area
The NZDUSD fell on the RBNZ statement and presser by the new Governor Adrian Orr.
The fall took the price below a key swing level at 0.6944-51. The low extended to 0.6902 and started to find a bid.
Looking at the hourly chart below, the pair moved below the aforementioned area at 0.6944 and a lower trend line after the RBNZ decision and rotated to the lows. When the price moved back above the broken trend line and "yellow area", and then corrected and held the level, the sellers turned to buyers.
Is the bottom in? Can we expect more corrective action?
The 0.6944-51 was a key level. The failure on the break certainly has me thinking that the low may be in place. What we do know is that area is a risk defining level. Stay above and price can go higher.
Having said that, there is a bunch of topside resistance defined by the:
- 38.2% at 0.69757
- The 100 hour MA at 0.6982
- The 50% retracement at 0.6998
- The 200 hour MA at 0.7001, and
- A topside trend line at 0.7007.
When a bottom/temp bottom is in place, the corrective action does leave a lot of hurdles to get to and through. That can stall the rally. However, it can also work to the buyers favor by giving them (and other buyers) new confidence as the levels are taken out.
The buyers are making a play. Let's see if they can keep the corrective move going in the new trading day.
